always work best in terms of covering bank loan losses that go beyond what could be expected from economic downturns. Instead …

The USD asset share of non-U.S. banks captures the demand for dollars by these investors. An instrumental variable …

, reduced role of securities markets, imperfect competition in the banking sector and the resulting high cost of bank lending to … private firms, the traditional channels (interest rate, bank lending, and asset price) are impaired in LICs. The exchange rate … channel is also undermined by central bank intervention in the foreign exchange market. These conclusions are supported by …